How Did Livium Unlock a A$6.6m Net Asset Boost This Year?
Livium Ltd reports a significant A$6.6 million uplift in net assets driven by a reduction in fire claim provisions, recognition of a deferred tax asset, and equity accounting of its LieNA® joint venture with Mineral Resources.
- 25% reduction in fire insurance claim provision releases A$2.1 million
- A$1.6 million deferred tax asset recognised from Envirostream's maiden tax profit
- LieNA® 50 – 50 joint venture with Mineral Resources adds A$2.9 million in net assets
- Improved financial position supports growth in core recycling operations
- Upcoming insurance claim hearing and mediation could further impact provisions
Financial Position Strengthened by Accounting Revisions
Livium Ltd (ASX, LIT) has announced a notable A$6.6 million uplift in its net asset position as of 30 June 2025, reflecting a series of accounting adjustments and strategic developments. This improvement comes amid the preparation of its FY25 Annual Report and follows the formation of a 50, 50 joint venture (JV) with Mineral Resources Ltd (ASX, MIN) focused on the LieNA® lithium extraction technology.
The company’s balance sheet benefited from a 25% reduction in the provisions related to a 2019 fire insurance claim at its Envirostream recycling facility in Campbellfield, Victoria. New information uncovered during legal discovery led to a reassessment of the provision, releasing approximately A$2.1 million and reducing the total provision from A$7.5 million to A$5.4 million. While the hearing is scheduled for early 2026, this adjustment already reflects a more optimistic outlook on the claim’s resolution.
Envirostream’s Maiden Profit Unlocks Deferred Tax Asset
Envirostream Australia Pty Ltd, Livium’s wholly owned battery recycling subsidiary, achieved its first accounting and tax profit in FY25. This milestone enabled the recognition of a deferred tax asset (DTA) of approximately A$1.6 million, bolstering the group’s net assets. The company anticipates ongoing profitability in this division, which is well-positioned to capitalise on the growing demand for lithium-ion battery recycling.
LieNA® Joint Venture Enhances Financial Foundation
Following the conversion of convertible notes and the establishment of the LieNA® JV with Mineral Resources, Livium ceased consolidating LieNA Pty Ltd and now accounts for its 50% interest using equity accounting. This change resulted in an uplift of around A$2.9 million in net assets for FY26. The JV represents a strategic partnership to advance Livium’s proprietary lithium extraction technology, providing a stronger financial and operational platform for future development.
Livium’s CEO, Simon Linge, highlighted that these financial improvements reflect the delivery of strategic targets and provide a solid foundation to accelerate growth in the company’s core recycling operations. However, he also noted that the company has no direct influence over the settlement of the insurance claims, with the upcoming hearing and mediation expected to bring further clarity.
Overall, these developments mark a positive step for Livium as it navigates the complexities of its insurance claims while advancing its technology partnerships and recycling business profitability.
Bottom Line?
Livium’s strengthened balance sheet sets the stage for growth, but upcoming insurance claim outcomes remain a key watchpoint.
Questions in the middle?
- How will the February 2026 insurance claim hearing impact Livium’s provisions and cash flow?
- What are the growth prospects and commercialisation timeline for the LieNA® lithium extraction technology within the JV?
- Can Envirostream sustain and build on its maiden profitability amid evolving battery recycling demand?
